Tag Archives: amzn

Alibaba Faces SEC Accounting Probe Of Singles Day, More

Alibaba ( BABA ) disclosed Wednesday that the Securities and Exchange Commission has been probing whether its accounting into its Singles Day e-commerce event and various consolidation practices violate U.S. securities laws. Shares of the e-commerce giant fell 3.9% to 77.96 in morning trade on the stock market today , undercutting the 50-day moving average where Alibaba has found support in recent days. IBD’s Take: How healthy is Alibaba’s stock, and how does it compare vs. key rivals such as Amazon? Find out at IBD Stock Checkup Alibaba reported the SEC probe in an SEC filing. Here is the key passage. “Earlier this year, the U.S. Securities and Exchange Commission, or SEC, informed us that it was initiating an investigation into whether there have been any violations of the federal securities laws. The SEC has requested that we voluntarily provide it with documents and information relating to, among other things: our consolidation policies and practices (including our accounting for Cainiao Network as an equity method investee), our policies and practices applicable to related party transactions in general, and our reporting of operating data from Singles Day. We are voluntarily disclosing this SEC request for information and cooperating with the SEC and, through our legal counsel, have been providing the SEC with requested documents and information. The SEC advised us that the initiation of a request for information should not be construed as an indication by the SEC or its staff that any violation of the federal securities laws has occurred. This matter is ongoing, and, as with any regulatory proceeding, we cannot predict when it will be concluded.” Singles Day — Nov. 11 — has become the world’s largest e-commerce event, far above Cyber Monday or the new Amazon ( AMZN ) Prime Day last year. Alibaba had $13.7 billion in sales in last year’s event, with JD.com ( JD ) and other Chinese retailers also taking part. Separately, Alibaba, Baidu ( BIDU ), Tencent ( TCEHY ) and other Chinese Internet companies should should see continued strong growth in online-to-offline spending, Moody’s says. Moody’s sees Baidu, Alibaba and Tencent, sometimes referred to as “BAT,” should deliver 15%-30% revenue growth over the next  12-18 months, partly due to O2O efforts that have increased customer engagement and monetization. Alibaba, Baidu and Tencent have spent billions of dollars on O2O-related initiatives in recent years. “For all three companies, we expect that their investments will remain high, as they establish or acquire end-to-end logistics capabilities,” Moody’s said.

Amazon’s Push Into Business E-Commerce An $18 Billion Opportunity?

Amazon ( AMZN ) is pushing deeper into business-to-business e-commerce, which one analyst estimates could add $18 billion in company revenue by 2020. The B2B unit, Amazon Business , began as Amazon Supply in 2012. The initiative was rebranded in April 2015 and Amazon — which posted 2015 revenue of $107 billion — recently indicated it reached more than $1 billion in annual sales, with 300,000 customers. Bank of America Merrill Lynch analyst Justin Post estimates Amazon Business will reach gross merchandise volume of $3.5 billion this year, resulting in revenue of $3 billion. He anticipates GMV of $8 billion next year and revenue of $6.4 billion. By 2020, estimates Post, Amazon will hit GMV of $25 billion and $18.6 billion in revenue. “Based on recent management comments, Amazon Business appears to be ready for prime time, and we wouldn’t be surprised if Amazon invests in marketing to raise awareness as Amazon’s procurement systems improve,” said Post in a research note. According to market research firm Frost & Sullivan, the U.S. B2B market is expected to reach $1 trillion in sales by 2020, and $6.7 trillion globally. “We think B2B provides significant runway for growth, which could help Amazon sustain its growth rates and premium valuation for many years,” wrote Post. He has a buy rating on Amazon stock, and a price target of 840. Amazon stock was near 705, up more than 1%, in afternoon trading in the stock market today , after touching a record high above 722 on May 12. It’s an IBD Leaderboard stock. Amazon Business sells a broad line of goods, such as office supplies, tools, industrial equipment, tractor equipment and office products. Competitors in the B2B e-commerce sector include Staples ( SPLS ), HD Supply Holdings ( HDS ), Office Depot ( ODP ), Grainger ( GWW ) and Fastenal ( FAST ).

Salesforce, Palo Alto, Red Hat In Race To $100 Billion Market Cap

A bullish Morgan Stanley reports calls Salesforce.com ( CRM ) the most likely software company to next hit the milestone of a $100 billion market valuation, though it says security firm Palo Alto Networks ( PANW ) is also in the hunt. Salesforce.com, a top provider of cloud-based software-as-a-service, has a market cap of $56 billion, while Palo Alto’s valuation is nearly $13 billion. “With the most customer data in the cloud and multiple solutions targeting over 62 million users, we see Salesforce.com as the clear leader in SaaS-based applications and well on their way to a $100 billion market cap,” Keith Weiss, a Morgan Stanley analyst, said in a research report. Salesforce.com stock has rallied since early February, after plunging at the start of 2016. Salesforce stock was up nearly 2% in midday trading in the stock market today , near 83. Salesforce.com has an IBD Composite Rating of 99, the highest possible. IBD Take: How does Salesforce.com rate a 99 CR? Find out with IBD Stock Checkup. As for Palo Alto Networks, Weiss wrote that “to achieve the revenue scale necessary to become a $100 billion market cap company, Palo Alto must successfully expand their focus from the network security segment to the broader pool of overall security spending.” Weiss says Red Hat ( RHT ) is also well positioned in the cloud market but might not reach the $100 billion valuation mark. It’s now less than $14 billion. As for a couple of other fast-growing SaaS providers, Weiss points to stiff competition. “In our view, the problem with Qlik Technologies ( QLIK ) or Tableau Software ( DATA ) becoming the next $100 billion company is the competitive environment,” he wrote. Salesforce.com will remain strong in SaaS, Weiss says, despite cloud competition from the likes of  Amazon.com ( AMZN ), Google parent  Alphabet ( GOOGL ) and Microsoft ( MSFT ). San Francisco-based Salesforce.com garners mainly subscription revenue from on-demand software delivered via the Internet cloud. It’s the No. 1 provider of customer relationship software. “With SaaS-based applications’ faster innovation cycles and easier integration of new functionality, it becomes harder for vendors to sustain differentiation and enables (broad product) vendors to garner broader ecosystems and higher market share — as seen by Salesforce.com’s 40%+ share of the sales force automation market,” Weiss wrote.